The Japanese economic downturn has seen orders for East Gippsland woodchips drop dramatically. The logging industry is now looking perilous. Strong rumours suggest this will be long term and serious. Coupled with this is the planned government cut-backs in log volumes due to past overcutting.
Chip trucks lying idle in Orbost, a blockade of the National Party members office by log trucks, demands for exit packages, stockpiles of chips, markets collapsing – who’d have thought wed see the day.
When woodchip markets dry up, the sawlog side of the show withers too, because woodchips are the tail that wags the dog. To honour their commitment to provide sawlogs to the industry, NRE are having to log forests that yield mostly pulpwood with a few sawlogs. Without a market for this, its now even less economic to log these areas.
Double trouble – markets and logs disappear
Coupled with the woodchip market problems, NREs is finally admitting their volume estimates have been a fantasy. Their reckless guesswork and rash promises are finally being admitted and planned cut backs (possibly 20-50%) have the industry in a panic.
So Lets Trash Some More
The National Party is proposing a solution … log more conservation reserves! Conservation values have paid dearly enough in the past from NRE incompetence. What has survived must never be considered as payment to the industry for NRE stuff ups.
Even loggers have said they dont want more protected areas logged – they want something left for their kids. Most seem to be wanting exit packages, but although Bracks is happy to allow RFA money to be used for buying loggers out, Tuckey was adamant that the Feds share should only be used to keep them in the industry making tables and chairs – that also dont have a market.
It all sounded so good
On 5th February 1997, Kennett and Howard signed the East Gippsland RFA. Marie Tehan, the then Liberal conservation Minister, promised 400 new jobs and $150 M investment in East Gippsland as a result. They patted themselves on the back and soaked in the accolades from the cheering loggers. Four years later were seeing no new jobs, bugger-all investment and a possible 200 extra blokes at the dole queue. So much for the wonderful $300 M RFA process that promised security to the industry.
“Go forth and invest”, the industry was told. “We’ve stitched it all up for the next 20 years.” This was despite many submissions to the RFA process warning of the lack of logs, the need to consider markets and to address the woodchip-driven nature of the industry.
We were told to butt-out – their assessments were thorough and scientific. The word woodchip was hardly mentioned in the 700 page pre-RFA document, but they did admit that low quality waste accounted for 70% of EGs volumes. Suddenly the bottom falls out of the woodchip market and the industry is in crisis.
The State Government insisted that logging syndicates hire more crews to create a competitive industry and invest in specialised equipment. Now, with a global downturn in the woodchip market, companies and workers have been left with expensive machinery they cant sell. But thats the risk any business takes in this world. However, these investments were the result of a $300 M government promise that all would be apples.
Value adding not the answer
Weve been hearing about value adding for the past 15 years, but its become little more than a buzz word. Theres only a limited market out there for hardwood tables and turned bowls always was, always will be.
The millions in subsidies and grants that the industry has been handed over the years should have gone into restructuring and helping other more viable industries. If it had, workers would be on to a new wicket by now, our ancient wildlife-rich forests would still be standing and we greenies could be pursuing more creative and harmonious professions.
Politicians can hardly hide behind their RFA now that every piece of it reeks of incompetence and collusion with woodchippers. They need to throw the final remains of it on the muck heap and make decisions based on reality, rather than a fear of the union or a drop in campaign donations.
The next few months will tell if this “mongrel of an industry” is bought to heel or put down.